Core Insights - Eli Lilly's aggressive push in the GLP-1 drug market has forced Novo Nordisk to lower its annual forecasts twice, with Tirzepatide becoming increasingly common on U.S. pharmacy shelves [1][3] - Eli Lilly's H1 2025 revenue reached $28.2862 billion, a 41% year-over-year increase, driven significantly by its diabetes business, which contributed nearly half of its revenue [1][3] Financial Performance - Eli Lilly's revenue breakdown for H1 2025: - U.S. market: $19.304 billion, up 43% - Europe: $4.963 billion, up 74% - Japan: $0.923 billion, up 11% - China: $0.917 billion, up 20% - Other markets: $2.18 billion, up 7% [1] - The diabetes segment, particularly Trulicity, Mounjaro, Humalog, and Jardiance, contributed $13.9728 billion [1] Product Performance - Tirzepatide's sales in H1 2025: - Mounjaro (diabetes version): $9.0407 billion, up 85% - Zepbound (weight loss version): $5.6933 billion, up 223% [2] - Zepbound's Q2 revenue was $3.381 billion, a 172% increase, while Novo Nordisk's Wegovy grew at 75% [3] Market Position - Eli Lilly's prescription share in the U.S. GLP-1RA market reached 57%, up from 53.3% in Q1, surpassing Novo Nordisk's 42.5% [2] - The revenue gap between Tirzepatide and Novo Nordisk's Semaglutide has narrowed to less than $2 billion [3] Competitive Landscape - Novo Nordisk's market challenges include a decline in growth expectations for Wegovy and Ozempic, leading to a significant drop in its market capitalization [3][4] - Analysts note that Eli Lilly's success is attributed to the superior efficacy of Tirzepatide and its established sales channels, which have been enhanced by its long-standing experience in the GLP-1 market [4]

Summary of Eli Lilly's Q2 2025 Earnings Call Company Overview - **Company**: Eli Lilly - **Date**: Q2 2025 Earnings Call Key Financial Performance - Gross margin reached **85%**, up **3%** year-over-year, driven by lower production costs and optimized product mix, partially offset by price declines [2][3] - Non-GAAP operating margin at **40.5%**, an increase of over **6 percentage points** year-over-year [4] - Earnings per share (EPS) increased by **61%** to **$6.31**, including a negative impact of **$0.14** from the acquisition of IPR and depreciation [4] - Revenue growth of **38%** in the U.S., primarily due to strong sales of **Mounjaro**, despite an **8%** price decline [3][5] - European revenue grew by **77%**, reflecting strong performance from the Montana business [5] - Revenue in China increased by **19%**, mainly due to increased sales from the Montana business [5] - Total revenue expected to be between **$60 billion** and **$62 billion** for 2025, with non-GAAP operating margin projected between **43%** and **45.5%** [3][13] Market Performance - U.S. market revenue growth driven by **Mounjaro**, **Bydureon**, and **Trulicity** sales [3] - International sales growth of **12%** in oncology, with U.S. prescriptions up **454%** [3][10] - Montana product line achieved **$5.2 billion** in global sales, becoming a leader in the type 2 diabetes prescription market [12] Research and Development Highlights - Multiple new clinical projects initiated, with increased R&D investment [6] - Acquisition of **Site One Therapeutics** and **Verb Therapeutics** to expand non-opioid pain and cardiovascular gene therapy portfolios [6] - FDA approval for new dosing schedule of **Casirol** and positive results from **Surpass CDOT** and **Brewing CLL 314** Phase III trials [7] - **Atern** Phase I trial showed significant weight loss in obese patients, with safety comparable to injectable GLP-1 drugs [8] Addressing Global Health Challenges - Eli Lilly is actively addressing the global obesity challenge with new drug submissions planned [8] - The company supports government reforms to share the costs of medical research more equitably and reduce consumer costs in the U.S. pharmaceutical market [9] Pricing and Cost Management - Eli Lilly's **Lily Direct** model offers affordable medications, with weight loss drugs priced over **50%** lower than previous prices and insulin prices reduced by **70%** [9] - The company emphasizes the need for urgent reforms in the U.S. pharmaceutical market to lower consumer costs [9] Future Expectations - Anticipated production capacity in the second half of 2025 expected to be at least **1.8 times** that of the second half of 2024 [14] - Continued focus on expanding market share in the obesity and diabetes sectors, with new product launches planned [12][20] Conclusion Eli Lilly's Q2 2025 performance reflects strong revenue growth across multiple markets, significant advancements in R&D, and a commitment to addressing global health challenges while managing costs effectively. The company is well-positioned for future growth with a robust pipeline and strategic acquisitions.

Clinical Trial Results & Drug Performance - Eli Lilly's diabetes drug, Mjaro, met the goal of a phase three trial by cutting the risk of heart disease in people with type 2 diabetes [1] - The trial showed Mjaro delivered an 8% lower rate of cardiovascular events than Trulicity and a 16% reduction in death from any cause [2] - Data strengthens the case for insurers, particularly in other parts of the world where the drug is launching [3] - One doctor worries the results aren't good enough to convince insurers in the US and might limit coverage of Mjaro since it wasn't significantly better than Trulicity [4] - Analysts were looking for a greater than 10% reduction in cardiovascular events [5] Market & Investor Reaction - The stock experienced a decline of approximately 4% [4] - There was disappointment as the drug didn't show it was significantly better than Trulicity [5][6] Emerging Trends - Plastic surgeons' business is booming due to "Ozempic face" (loose skin from weight loss) [7]

Lilly’s blockbuster diabetes drug Mounjaro was about as good at preventing heart attacks and strokes as its older medicine Trulicity in a head-to-head study https://t.co/53L2jWfyhk ...

Core Insights - Eli Lilly's diabetes drug Mounjaro demonstrated heart health benefits in a late-stage trial compared to Trulicity, meeting the study's primary goal of non-inferiority in treating Type 2 diabetes with cardiovascular disease [2][4] - Despite the positive results, Eli Lilly's shares fell 4% in premarket trading as the outcomes did not exceed some analysts' expectations for superiority over Trulicity [2][3] - The trial showed Mounjaro reduced the risk of cardiovascular death, heart attack, or stroke by 8% compared to Trulicity, with additional benefits including a 16% lower rate of all-cause mortality [4][5] Company Positioning - Eli Lilly believes the new data strengthens Mounjaro's position as the preferred choice for Type 2 diabetes patients, especially as Trulicity faces patent expiration in 2027 [3][10] - The company plans to submit heart health data to global regulators by the end of the year, potentially leading to approvals for Mounjaro's use in cardiovascular health by 2026 [11] Market Dynamics - Mounjaro's current approval already covers many patients with Type 2 diabetes who also have cardiovascular disease, as approximately 30% of these patients are affected [13] - Analysts suggest that even if Mounjaro shows similar heart health benefits as Trulicity, it may not significantly change prescribing behaviors among doctors [14][15] Clinical Insights - The trial was the longest and largest to date on tirzepatide, enrolling over 13,000 participants, and showed Mounjaro's advantages in cardiovascular measures and weight loss [4][16] - Some clinicians noted that the difference in all-cause mortality rates between Mounjaro and Trulicity is clinically significant, aiding in treatment decision-making [6][7] Competitive Landscape - Eli Lilly is solidifying its lead over Novo Nordisk in the growing market for diabetes and weight loss drugs, with both companies demonstrating additional health benefits of their products [10]

Core Viewpoint - Novo Nordisk's semaglutide injection (brand name: Ozempic) has received approval from China's National Medical Products Administration (NMPA) for a new indication to treat chronic kidney disease (CKD) in adults with type 2 diabetes, marking it as the first and only GLP-1 receptor agonist approved for this purpose in China [2] Group 1: Clinical Trial Results - The FLOW clinical trial, a randomized, double-blind, placebo-controlled study, involved 3,533 patients with type 2 diabetes and CKD to evaluate the efficacy of 1.0 mg semaglutide in preventing kidney damage progression and reducing cardiovascular and kidney mortality risks [4] - Results indicated a significant 24% reduction in the risk of kidney disease progression and cardiovascular and kidney mortality for patients receiving 1.0 mg semaglutide compared to placebo, achieving the primary endpoint of the trial [5] Group 2: Meta-Analysis Findings - A meta-analysis published in The Lancet Diabetes & Endocrinology, involving 85,373 participants, demonstrated that GLP-1 receptor agonists, including semaglutide, reduced the risk of kidney failure by 16% and the risk of kidney function deterioration by 22% compared to placebo [6][7] - The overall risk of kidney failure, kidney function deterioration, and death due to kidney disease was reduced by 19% with the use of GLP-1 receptor agonists [7] Group 3: Broader Implications - The findings suggest that GLP-1 receptor agonists not only benefit patients with type 2 diabetes but also provide significant renal and cardiovascular protection for those with CKD, indicating a potential shift in clinical guidelines for managing these conditions [10] - The research emphasizes the need for further work to integrate these findings into clinical practice and improve access to GLP-1 receptor agonists for patients who could benefit from them [10]

Core Viewpoint - Eli Lilly and Company's stock has declined 15.7% over the past year due to a first-quarter earnings miss, guidance cut, and positive developments at rival Novo Nordisk, alongside broader economic challenges [1][10]. Group 1: Company Performance - Lilly's cardiometabolic division is its strongest segment, driven by the success of GLP-1 therapies Mounjaro and Zepbound, which together account for approximately 48% of total revenues [3][4]. - Despite slower-than-expected sales in the second half of 2024, Mounjaro and Zepbound saw a resurgence in the first quarter of 2025 due to new international market launches and improved supply [5][6]. - Lilly anticipates continued growth for Mounjaro and Zepbound through expanded international uptake and deeper market penetration in the U.S. [6][7]. Group 2: Product Pipeline and Future Growth - Lilly has secured approvals for several new therapies, including Omvoh, Jaypirca, Ebglyss, and Kisunla, which are expected to contribute to revenue growth in 2025 [10][11]. - The company is also advancing its pipeline in obesity, diabetes, and cancer, with several key mid and late-stage data readouts expected this year [12]. - Lilly is diversifying beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas, including recent M&A deals to enhance its pipeline [13]. Group 3: Competitive Landscape - The obesity market is projected to reach $100 billion by 2030, with Lilly and Novo Nordisk currently dominating the space [14]. - Mounjaro and Zepbound face competition from Novo Nordisk's semaglutide products and emerging candidates from companies like Amgen and Viking Therapeutics [15][17]. - Other pharmaceutical companies are also entering the obesity market, which could challenge Lilly's and Novo Nordisk's market positions [18]. Group 4: Financial Outlook - Lilly expects 2025 revenues to be between $58 billion and $61 billion, indicating a year-over-year growth of approximately 32% [30]. - The company's stock has increased by over 400% in the past five years, primarily due to successful drug launches and a strong pipeline [29]. - Despite a high valuation with a price/earnings ratio of 29.54 compared to the industry average of 15.04, Lilly's stock is trading below its five-year mean [23].

Summary of US Large Cap Pharmaceuticals: Mid-Year State Of Play Industry Overview - The report focuses on the US Large Cap Pharmaceuticals sector, analyzing key companies such as ABBV, LLY, JNJ, MRK, BMY, and PFE [6][5][32]. Core Insights and Arguments 1. **Revenue Growth and Stability**: Projected revenues from growth/stable products for 2025-2030 are as follows: ABBV at $10.39 billion, LLY at $3.06 billion, JNJ at $1.68 billion, MRK at $1.37 billion, BMY at $0.60 billion, and PFE at $0.54 billion [5]. 2. **Patent Cliff Exposure**: The number of years to the next major patent cliff varies, with ABBV and MRK at 3.5 years, while LLY and JNJ face longer timelines [5]. 3. **Market Sentiment**: The report indicates a "Launch Trade" momentum, with high investor psychology impacting stock performance, particularly for ABBV and GILD as popular longs, while MRK is viewed as a funding underweight [6]. 4. **Macro Environment**: A friendlier US macro backdrop with diminished recession risks and benign inflation data is noted, which could complicate the case for large-cap biopharma relative to other sectors [6]. 5. **Drug Pricing Uncertainty**: Ongoing debates regarding drug pricing and potential implementation of Most Favored Nation (MFN) pricing are highlighted as significant uncertainties affecting investor sentiment [6]. 6. **Key Catalysts for 2H25**: Important upcoming catalysts include LLY's ATTAIN-1 data for an oral obesity pill, BMY's ADEPT-2 Phase 3 data for Alzheimer's treatment, and MRK's CADENCE trial outcomes [6]. Additional Important Considerations 1. **Tariff Implications**: The report discusses potential tariffs on pharmaceuticals, with an expected starting rate of 25% on transfer pricing, potentially dropping to around 10% based on negotiations [6]. 2. **Investor Positioning**: The healthcare sector is experiencing a positioning cleanse, with Medtech favored over large-cap biopharma [6]. 3. **Earnings Setup**: Investor sentiment is more comfortable with ABBV, PFE, and LLY, while concerns are raised regarding BMY's performance [6]. 4. **Government Exposure**: The report notes that government end-market exposure varies significantly among companies, with LLY and MRK having over 35% exposure to Medicare/Medicaid revenues [5]. Conclusion The US Large Cap Pharmaceuticals sector is navigating a complex landscape characterized by macroeconomic factors, regulatory uncertainties, and evolving investor sentiment. Key companies are positioned differently based on their revenue growth potential, patent cliff exposure, and government market dependencies. The upcoming catalysts and tariff implications will be critical in shaping the sector's performance in the second half of 2025.

Core Viewpoint - The article discusses the safety concerns and recommendations regarding the use of GLP-1 medications during pregnancy and breastfeeding, highlighting the need for caution and further research in this area [1][3]. Group 1: Research on GLP-1 Medications and Pregnancy - A large study published in January 2024 in JAMA Internal Medicine tracked around 50,000 children born to mothers with type 2 diabetes who used GLP-1 or insulin in early pregnancy, finding no increased risk of congenital defects compared to insulin use [5]. - Another study published in 2023 reviewed 39 independent studies on the effects of GLP-1 agonists and SGLT2 inhibitors during pregnancy and breastfeeding, concluding that there is extremely limited information on their safety [6]. Group 2: Risks Associated with GLP-1 Use During Pregnancy - Potential risks of GLP-1 medications during pregnancy may include miscarriage, low birth weight, and congenital defects, primarily due to their impact on maternal food intake and weight gain [6][7]. - Although concerns are mainly based on animal studies, the lack of human research has led to recommendations for discontinuation during pregnancy [7]. Group 3: Recommendations for Women Planning to Become Pregnant - Women are advised to stop using any GLP-1 medications at least two months before attempting to conceive, along with adopting additional preconception lifestyle measures [8]. - The American Diabetes Association recommends insulin as the preferred medication for managing diabetes during pregnancy, while other diabetes medications like metformin and glipizide are not first-line treatments due to their placental transfer [7][8]. Group 4: Breastfeeding Considerations - There is insufficient research to determine the safety of GLP-1 medications during breastfeeding, leading to recommendations against their use during this period [9][10].

Group 1 - Morgan Stanley maintains an "Overweight" rating on Eli Lilly (LLY.US) with a target price of $1133, based on data from IOVIA regarding the diabetes and weight loss drug market [1] - As of June 13, the total prescription volume (TRx) for Mounjaro was 577,200, and new prescriptions (NRx) were 298,900, showing a slight decrease from the previous week [1] - The TRx for Zepbound was 432,300, with NRx at 293,900, also reflecting a decrease from the prior week [1] Group 2 - Morgan Stanley is closely monitoring Eli Lilly's Mounjaro and Zepbound as they are core products, with overall GLP-1 drug TRx growing approximately 41% year-over-year [2] - The combined TRx for Mounjaro, Trulicity, and Zepbound was about 1,170,500, down 2.1% from the previous week [2] - The market share for Eli Lilly's GLP-1 patent portfolio remains stable at approximately 61% [2] Group 3 - Eli Lilly reported that bottled medications through LLY Direct accounted for 10% of TRx and 25% of new prescriptions in Q1 [3] - Zepbound bottled medication represented about 21% of Zepbound TRx this week [3]